1... See Tex. R. App. P. 47.4.

COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 2-08-457-CV

DARRELL K. WALLANDER APPELLANT

V.

TEXOMA COMMUNITY CREDIT UNION APPELLEE

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FROM THE 89TH DISTRICT COURT OF WICHITA COUNTY

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MEMORANDUM OPINION1

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In five issues, appellant Darrell K. Wallander appeals the trial court’s order

granting the summary judgment motion of appellee Texoma Community Credit

Union (Texoma) on its claim for a deficiency judgment following the sale of

Wallander’s repossessed car. We affirm.
2... As part of the 2001 agreement, Texoma gained the right to take

possession of and sell any property given as security for a particular loan

advance. The agreement stated that Wallander still had to pay any debt

remaining after the property had been sold.

3... At the time of the 2005 loan, the parties valued Wallander’s car at

$7,875.

4... Because of the accrual of interest since filing its petition, Texoma

sought $4,341.96 in damages in its summary judgment motion, along with

$1,500 in attorney’s fees.

2

Background Facts

In 2001, Texoma agreed to make occasional loan advances to Wallander.2

On April 27, 2005, Wallander borrowed $6,024.75 from Texoma, agreeing to

pay monthly installments on the loan and offering his 1999 Pontiac as security.3

Wallander defaulted on the loan, and Texoma repossessed the car and sold it.

However, the sales price did not cover Wallander’s remaining debt.

In May 2008, Texoma filed its petition, seeking a judgment for the unpaid

debt of $3,913.86 plus attorney’s fees. Texoma attached copies of the loan

documents to its petition. Wallander answered by way of general denial.

In September 2008, Texoma filed its motion for summary judgment.4 The

motion included an affidavit from Ken Thomason, Texoma’s chief lending

officer, swearing to the validity of the loan documents, Wallander’s default and

his refusal to pay the balance, and Thomason’s familiarity with appropriate

statutory procedures.
3

Wallander filed a response. He noted that Texoma filed its motion less

than two months after he had appeared and answered, and he objected to the

summary judgment submission setting based on his alleged insufficient time to

prepare his case. He submitted a letter from Texoma dated June 25, 2007,

stating that the car had sold for $200 and the deficiency was $6,321.86. He

also objected to Thomason’s affidavit. He contended that there were genuine

material issues of fact, citing the discrepancy between the $200 sales price

indicated in Texoma’s letter and the $2,608 sales price claimed in Thomason’s

affidavit.

On October 28, 2008, the trial court granted summary judgment for

Texoma in the amount of $4,341.96 plus attorney’s fees and interest. This

appeal followed.

The Propriety of the Trial Court’s Summary Judgment Decision

Summary judgment principles

We review summary judgments de novo. Gray v. Nash, 259 S.W.3d

286, 289 (Tex. App.—Fort Worth 2008, pet. denied). The function of

summary judgment practice is not to deprive a litigant of the right to a jury trial

but to eliminate patently unmeritorious claims and untenable defenses.

Gulbenkian v. Penn, 151 Tex. 412, 416, 252 S.W.2d 929, 931 (1952).
4

Summary judgment is proper when parties do not dispute the relevant facts.

Havlen v. McDougall, 22 S.W.3d 343, 345 (Tex. 2000).

In a summary judgment case, the issue on appeal is whether the movant

met the summary judgment burden by establishing that no genuine issue of

material fact exists and that the movant is entitled to judgment as a matter of

law. Tex. R. Civ. P. 166a(c); Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211,

215 (Tex. 2002); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671,

678 (Tex. 1979). The burden of proof is on the movant, and all doubts about

the existence of a genuine issue of material fact are resolved against the

movant. Sw. Elec. Power Co., 73 S.W.3d at 215.

When reviewing a summary judgment, we take as true all evidence

favorable to the nonmovant, and we indulge every reasonable inference and

resolve any doubts in the nonmovant’s favor. Valence Operating Co. v.

Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Evidence that favors the movant’s

position will not be considered unless it is uncontroverted. Great Am. Reserve

Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex. 1965).

But we must consider whether reasonable and fair-minded jurors could differ in

their conclusions in light of all of the evidence presented. See Wal-Mart Stores,

Inc. v. Spates, 186 S.W.3d 566, 568 (Tex. 2006); City of Keller v. Wilson, 168

S.W.3d 802, 822–24 (Tex. 2005).
5

We can only consider the material on file with the trial court as of the

time the summary judgment was granted. Brookshire v. Longhorn Chevrolet

Co., 788 S.W.2d 209, 213 (Tex. App.—Fort Worth 1990, no writ). Pleadings,

even if sworn to, do not constitute summary judgment proof. Laidlaw Waste

Sys., Inc. v. City of Wilmer, 904 S.W.2d 656, 660 (Tex. 1995).

Analysis

In five related issues, Wallander asserts that summary judgment is

precluded because (1) Texoma’s pleadings did not follow the provisions of rule

185 of the rules of civil procedure; (2) Texoma failed to prove that the sale of

the car was commercially reasonable or that it complied with sections 9.610

and 9.611 of the business and commerce code; and (3) there are genuine

material issues of fact. See Tex. R. Civ. P. 185; Tex. Bus. & Com. Code Ann.

§§ 9.610–.611 (Vernon 2002).

Compliance with rule 185 of the rules of civil procedure

In his second issue, Wallander argues that the trial court erred by granting

Texoma’s summary judgment motion because Texoma’s pleadings did not

follow rule 185 to establish sufficient evidence to support a prime facie case

in a suit on a sworn account. The rule states,

When any action or defense is founded upon an open account or

other claim for goods, wares and merchandise, including any claim

for a liquidated money demand based upon written contract or
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founded on business dealings between the parties, or is for

personal service rendered, or labor done or labor or materials

furnished, on which a systematic record has been kept, and is

supported by affidavit of the party, his agent or attorney taken

before some officer authorized to administer oaths, to the effect

that such claim is, within the knowledge of the affiant, just and

true, that it is due, and that all just and lawful offsets, payments

and credits have been allowed, the same shall be taken as prima

facie evidence thereof, unless the party resisting such claim shall

file a written denial, under oath. A party resisting such a sworn

claim shall comply with the rules of pleading as are required in any

other kind of suit, provided, however, that if he does not timely file

a written denial, under oath, he shall not be permitted to deny the

claim, or any item therein, as the case may be. No particularization

or description of the nature of the component parts of the account

or claim is necessary unless the trial court sustains special

exceptions to the pleadings.

Tex. R. Civ. P. 185.

When a plaintiff properly complies with rule 185, a defendant must file

a sworn denial to defend against the plaintiff’s prima facie claim. Panditi v.

Apostle, 180 S.W.3d 924, 926–27 (Tex. App.—Dallas 2006, no pet.); see Rizk

v. Fin. Guardian Ins. Agency, Inc., 584 S.W.2d 860, 862 (Tex. 1979)

(explaining that a verified denial “destroys the evidentiary effect of the itemized

account attached to the petition and forces the plaintiff to put on proof of his

claim”). When a plaintiff does not comply with the rule, an unsworn general

denial is a sufficient initial response to the claim. See Babwah v. Mem’l City

Gen. Hosp. Corp., No. 14-93-00240-CV, 1994 WL 35571, at *1 n.1 (Tex.
7

App.—Houston [14th Dist.] Feb. 10, 1994, no writ) (not designated for

publication).

Thus, under either of these scenarios, a defendant may negate a pleading

on an itemized account and force the plaintiff to put on proof of its claim.

United Bus. Machs. v. Entm’t Mktg., Inc., 792 S.W.2d 262, 263–64 (Tex.

App.—Houston [1st Dist.] 1990, no writ). However, a plaintiff can still properly

recover summary judgment in such a case if it files legal and competent

summary judgment evidence establishing the validity of its claim as a matter of

law. See id. at 264; see also Birdwell v. Texins Credit Union, 843 S.W.2d 246,

248 (Tex. App.—Texarkana 1992, no writ) (examining rule 185 and

distinguishing between a judgment awarded on the basis of that rule and a

judgment awarded on the basis of a separate summary judgment motion). Such

is the case here.

Texoma filed an unsworn petition with copies of the loan documents

attached. Later, Texoma filed a separate motion for summary judgment with

the Thomason affidavit and the same loan documents attached; Texoma did not

move for judgment based solely on its petition.

Wallander has not directed us to any cases indicating that a plaintiff’s

failure to follow the pleading standards of rule 185 precludes that plaintiff from
5... Enernational Corp. v. Exploitation Eng’rs, Inc., which is relied upon by

Wallander in his brief, regarded only a summary judgment on the pleadings

based on compliance with rule 185; it did not concern a separately-filed and

independently-supported summary judgment motion under other rules of civil

procedure. 705 S.W.2d 749, 750 (Tex. App.—Houston [1st Dist. ] 1986, writ

ref’d n.r.e.).

6... Although Wallander’s argument on appeal relies on these sections, he

did not discuss or even cite either provision in his two-page summary judgment

response at trial.

8

later successfully litigating a separate summary judgment motion.5 Therefore,

even if Texoma’s petition was not initially compliant with rule 185, that

noncompliance is immaterial to the trial court’s decision to grant its

subsequently-filed summary judgment motion. See Birdwell, 843 S.W.2d at

248; United Bus. Machs., 792 S.W.2d at 264. We overrule Wallander’s second

issue.

Statutory requirements related to the commercial reasonableness

of Texoma’s sale of Wallander’s car

In his first, third, and fourth issues, Wallander argues that the trial court

erred in granting Texoma’s motion because Texoma failed to prove commercial

reasonableness in accordance with sections of the business and commerce

code. Section 9.610 of the business and commerce code regards disposition

of collateral after default (including the requirement of commercial

reasonableness), and section 9.611 concerns notification before disposal of

collateral. Tex. Bus. & Com. Code Ann. §§ 9.610–.611.6 These statutory
7... Former section 9.504 of the business and commerce code has been

equated to current sections 9.610 and 9.611. See Caprock Inv. Corp. v.

F.D.I.C., 17 S.W.3d 707, 712–13 (Tex. App.—Eastland 2000, pet. denied).

9

requirements are in the nature of conditions to a creditor’s recovery in a

deficiency suit. See Greathouse v. Charter Nat’l Bank-Sw., 851 S.W.2d 173,

176 (Tex. 1992).

However, “[i]n a suit brought by a secured creditor to recover a deficiency

following the sale of collateral, if a creditor pleads that all conditions precedent

have been performed or have occurred, it is required to prove that its

disposition of the collateral was commercially reasonable only if the debtor

specifically denies it in his answer.” Al Gailani v. Riyad Bank, Houston Agency,

144 S.W.3d 1, 3 (Tex. App.—El Paso 2003, pet. denied) (citing Greathouse,

851 S.W.2d at 176–77). As the San Antonio court of appeals explained,

For a creditor to recover in a deficiency suit, he must present

evidence showing the commercial reasonableness of the disposition

of the collateral and notification of the disposition to the debtor as

required by statute. Prior to the 1992 Greathouse decision, the

Texas courts of appeals were split as to whether the creditor

carried the burden to prove commercial reasonableness or whether

commercial unreasonableness was a defense. Today, it is

well-settled that the creditor carries the burden: “A commercially

reasonable disposition of collateral is in the nature of a condition to

a creditor’s recovery in a deficiency suit.” “The only limits on the

creditor’s disposition of the collateral is that it must be

commercially reasonable, and must be made only after notification

to the debtor if required by section 9.504.7 Then and only then is

he entitled to sue for a deficiency.” The creditor’s burden can be
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met by pleading specifically or averring generally that all conditions

precedent have been met.

Friedman v. Atl. Funding Corp., 936 S.W.2d 38, 40–41 (Tex. App.—San

Antonio 1996, no writ) (citations and footnotes omitted) (emphasis added);

see McGee v. Deere & Co., No. 03-04-00222-CV, 2005 WL 670505, at *2

(Tex. App.—Austin Mar. 24, 2005, pet. denied) (mem. op.) (explaining that the

“burden of showing commercially reasonable disposition of collateral and

notification of disposition to debtor can be met by pleading specifically or

averring generally that all conditions precedent to deficiency suit have been

met”); see also Tex. R. Civ. P. 54 (stating that in pleading performance of a

condition precedent, “it shall be sufficient to aver generally that all conditions

precedent have been performed or have occurred. When such performances or

occurrences have been so pled, the party so pleading same shall be required to

prove only such of them as are specifically denied by the opposite party”).

In its petition, Texoma alleged, “All conditions precedent to [the] right of

recovery on this claim have occurred or have been performed.” Wallander

answered with a general denial. Because Wallander did not specifically deny

the occurrence of the statutory conditions, Texoma’s pleading is sufficient, and

no proof is needed. See Greathouse, 851 S.W.2d at 176–77; Al Gailani, 144

S.W.3d at 3; Friedman, 936 S.W.2d at 40–41; cf. Lister v. Lee-Swofford Invs.,
8... We note that Thomason’s affidavit demonstrated Texoma’s

compliance with the business and commerce code. In the affidavit, he stated,

I am [] familiar with the requirements imposed upon a creditor for

a commercially reasonable sale and disposition of collateral in

keeping with Article 9 of the Texas Business and Commerce Code.

I am familiar with what are the reasonable, ordinary and prudent

commercial practices of a lender in such situations. I have been

involved in repossessions and resale of vehicles on numerous

occasions and I am aware of the best procedure available following

default in order to obtain the highest price for such vehicles and to

dispose of them in a commercially reasonable manner.

An employee of the credit union previously examined the

vehicle held as collateral for the loan involved in this lawsuit . . . .

All efforts were made to obtain the highest value at the time of the

sale of the collateral and to conduct such sale . . . in a

commercially reasonable manner. The [vehicle was sold] for a net

value of $2,608.00 and credit was applied accordingly to the loan

balances owed by [Wallander]. The procedures used in the sale of

the collateral were conducted in a commercially reasonable manner

as required by the Code.

Thomason’s affidavit also recited that Texoma had allowed Wallander “all

payments, offsets[,] and credits.”

11

L.L.P., 195 S.W.3d 746, 748 (Tex. App.— Amarillo 2006, no pet.) (analyzing

section 9.610 and stating that because the defendants raised the issue of the

commercial reasonableness of the sale of the collateral in their pleadings, the

plaintiff bore the burden at trial to prove that its sale was commercially

reasonable).8
9... Part of Wallander’s fifth issue also concerns the commercial

reasonableness of Texoma’s sale of his car. For the same reasons, we overrule

that portion of his fifth issue.

12

We therefore overrule Wallander’s first, third, and fourth issues.9

The discrepancy of the summary judgment evidence on damages

Finally, in the remainder of his fifth issue, Wallander argues that the trial

court erred by granting Texoma’s motion because he demonstrated the

existence of a genuine issue of material fact. The parties agree that Wallander

entered into the loan transaction with Texoma, that Wallander’s car was

repossessed and sold, and that the sales price was less than the debt owed.

However, as is described above, the summary judgment record contains a

discrepancy about the amount for which the car was sold, with Wallander’s

summary judgment proof indicating a larger resulting deficiency.

Wallander filed a letter from Texoma stating the car was sold for $200.

Texoma filed Thomason’s affidavit stating the car was sold for $2,608. Thus,

the amount used by Texoma as an offset for Wallander’s outstanding debt is

actually higher than that used by Wallander, giving Wallander a larger credit

against his debt and leaving him with a smaller deficiency.

Even if the price difference is a fact issue, it is not material. It does not

affect the decision of the case on its merits and actually weighs in favor of
10... Texoma has not complained that it is owed more.

13

Wallander. We conclude and hold that the summary judgment must be affirmed

because the evidence indicates that Texoma is entitled to at least the amount

of damages contained in the judgment.10 See D. G. Bros. v. Pizza Inn, Inc., No.

06-98-00151-CV, 2000 WL 16470, at *5 (Tex. App.—Texarkana Jan. 12,

2000, pet. denied) (not designated for publication); United Bus. Machs., 792

S.W.2d at 265; cf. Roadside Stations, Inc. v. 7HBF, Ltd., 904 S.W.2d 927,

933 (Tex. App.—Fort Worth 1995, no writ) (reversing a summary judgment

because the appellees did not prove the amount of damages entered in the

judgment). We therefore overrule Wallander’s fifth issue.

Conclusion

Having overruled all of Wallander’s issues, we affirm the trial court’s

judgment.

TERRIE LIVINGSTON

JUSTICE

PANEL: LIVINGSTON, GARDNER, and WALKER, JJ.

DELIVERED: June 11, 2009